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					                                                 Real Property Desk Guide                5-1

Chapter 5: Acquisition of Interests in Real Property

         When newly authorized programs or expansion needs produce a requirement for
additional real property, the responsible program office should develop the necessary
justification for the project. Such justification should include a detailed explanation of the
purpose, the estimated land area required and the square footage for any improvements, the
location, and the estimated time period for the need. Development of the justification is a
collaborative effort by the program office, counsel, and the fiscal/budgetary offices, along with
the realty representative. The realty specialist is responsible for assuring that pertinent
information is obtained from all involved offices. In developing the need, information of the type
outlined in former DOE Order 4300.1C, Real Property Management, Chapter I, paragraph I.e.
(See Appendix 5-1) should be included.

     If the program need can be satisfied on Government-owned property, it must be utilized.
Property in the DOE inventory must be screened first. If none is available, the General Services
Administration (GSA) and other Federal property holding agencies should be contacted. Reasons
for not using available Government-owned property must be documented in the project file.

     If office space is needed to house Federal employees, it will normally be provided by GSA,
unless the location falls within the area in which DOE has been delegated lease acquisition
authority by GSA. (See Chapters 6 and 7 on leasing).

     A temporary need for space may be solvable with relocatable personal property; however, it
should be noted that the DOE Strategic Plan has a goal of eliminating all trailers currently being
used by DOE to house personnel or other program needs by 2009.

        Prior to initiating action to acquire real property by fee acquisition, lease (where term
exceeds 5 years and total rent exceeds $500,000 per annum), construction (line item projects
exceeding $5 million), or transfer of excess property or withdrawal from the public domain, a
real estate plan should be developed. The plan will serve as the basis for subsequent site
selection activity and should reflect the agreement of all concerned DOE elements, including
program, budget, procurement, and real estate. Chapter I, paragraph 2.e. of Order 4300.1 C
(Appendix 5-1) describes the information that should be included in such a plan.

U. S. Department of Energy                                                Revised June 2004
Chapter 5: Acquisition of Interests In Real Property
                                                 Real Property Desk Guide                 5-2
         The determination to acquire privately owned property for a project triggers a request for
the necessary appropriated funds. Pending approval, site acquisition planning should continue. If
it is determined that only one site can satisfy the project need, a sole source justification should
be prepared.

    When more than one site will be considered, a site investigation team should be formed.
The Good Practice Guide, "Site-Selection Process" (GPG-FM-024), describes the process for
team formation (see Section 2.1). GPG-FM-024 is included in this Desk Guide as Appendix 5-2.

      When acquisition of real property interests is involved in a site selection, the realty
specialist from the acquiring field office must be a member of the team. The team's primary role
is to develop information and provide advice on possible sites. In preparing its recommendations,
the team will make sure that its actions are in compliance with the Rural Development Act of
1972 which gives first priority to the location of new offices and other facilities in rural areas,
Executive Order 12372 (Intergovernmental Review of Federal Programs), and will arrange for
public notice of the site investigation. Information that should be included in an advertisement of
the proposed site review is outlined in Chapter 1, paragraph 3.e. (2) of Order 4300.1C (Appendix

Inspection of Sites and Site Evaluation
      The team members will contact owners of potential sites that were not offered in response
to the ad to determine their interest in selling their property, will thoroughly inspect all offered
sites, will collect and evaluate information on the sites, and prepare a site evaluation report.

     A central element of the documentation developed for the recommendation of a specific site
is information and data on environmental impacts. DOE site selection decisions must be
supported by the National Environmental Policy Act (NEPA) assessment process. The DOE
NEPA guidance manual and 10 CFR 1021 provide information on the appropriate level of
documentation for various levels of actions within the site-selection process. Considerations
regarding toxic and hazardous substances at potential sites are covered in the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA). A thorough investigation
of properties being considered for acquisition should be made to assure that no contamination
exists. (See 4300.1C, Chapter I, paragraph 3.f (2) and (3), Appendix 5-1.)

     The documentation will also include a description of the parcels and the estate(s) to be
acquired, a list of the owners, the current use being made of the parcels, and an indication of the
degree of compliance with seismic standards. If subsurface rights exist on any of the parcels,
they should be clearly identified, as well as any submerged areas adjacent to high lands, and any
easements, licenses, leases or other third-party rights affecting the property. Detailed maps
indicating the property to be acquired, and its general vicinity, should be included in the
documentation, along with an indication of any significant features that might affect the

U. S. Department of Energy                                                 Revised June 2004
Chapter 5: Acquisition of Interests In Real Property
                                                 Real Property Desk Guide                 5-3
Cost Estimates
     The realty specialist should develop an estimated acquisition cost for the proposed site. The
estimate would include both the total property cost and any charges or fees for related
obligations and services such as appraisals, relocation (pursuant to Public Law 91646), title
search, and moving costs. If leasing is being considered, a market survey of the area to determine
prices per square foot would be required. Information on local taxes, including the assessed value
of the property to be acquired, should also be obtained.

Use of the Army Corps of Engineers
     In instances where DOE realty expertise is not available, the services of another Federal
agency, such as the Corps of Engineers or GSA, may be sought. Generally, reliance will be
placed on the assistance of the Corps of Engineers, since that agency has historically provided
real estate service to DOE and its predecessor activities. The Corps can perform major
acquisitions or small, single-action services such as an appraisal. It can also provide service in
other real estate functional areas such as out granting and disposal.

     In accordance with a Memorandum of Understanding (MOU) between DOE and the Corps
(see Appendix 5-3), each Field Office of DOE can work directly with each Corps Field Office,
without Headquarters involvement, whenever needed. Only very large projects, such as the
acquisition of property for the Strategic Petroleum Reserve, require Headquarters approval of
both DOE and the Corps.

     Figure 5-1 is a generic Task Order that can be utilized to request the Corps, under the MOU,
to perform a specific real estate service.

Site Selection
     Once the site evaluation report, along with the team's recommendation, is completed, it is
forwarded to the site selection official for decision. After a site has been selected, the acquiring
office may proceed with acquisition of title.

U. S. Department of Energy                                                 Revised June 2004
Chapter 5: Acquisition of Interests In Real Property
                                                    Real Property Desk Guide                              5-4

                                   U. S. DEPARTMENT OF ENERGY
   1. Work Order No.                             3. Date Prepared

2. 2. MOU No.
   4. Name of Project Manager                                5. DOE Office
      Location and Telephone No.                                (Office of Primary Technical Responsibility)

   6. Description of Acquisition (use reverse side or additional sheet if necessary)

   7. Performance:                                        Start Date:_________ Completion Date: ___________

   8. Estimated Cost and Fund Citations

   9. Remarks                                                10. DOE Field Office Approval Date

                                                             Requiring Office___________________

                                                             Administrative Office_______________

                                         Approvals and Acceptance

   For the Corps of Engineers                                For the Department of Energy

   Name_______________________________                       Name_________________________________

   Title________________________________                     Title__________________________________

   Date________________________________                      Date__________________________________

                                                 Figure 5-1
                  Generic Task Order for Requesting Corps of Engineers Real Estate Services

   U. S. Department of Energy                                                            Revised June 2004
   Chapter 5: Acquisition of Interests In Real Property
                                                 Real Property Desk Guide                  5-5

Necessary Data for Acquisition of Property
       Once a site has been selected, the acquiring office initiates the purchase of the property.
Ownership information, including a complete legal description for each parcel, should be
assembled, if not already obtained during the selection stage. The services of a title service
company should be secured early in the acquisition process. A preliminary title report should
be obtained for use by the appraiser and the negotiator.

     Appraisals are necessary for all acquisitions of real property. Procurement of appraisal
service is discussed in more detail on page 9 of this chapter. Finally, a boundary survey may be
needed to identify individual parcels and land rights, and to verify the legal description contained
in the title evidence.

     Pursuant to PL 91-646, the owner(s) of the property to be acquired must be furnished a
written statement of, and summary of the basis for, the amount established by DOE as just
compensation (see Appendix 5-4). An Offer to Sell should accompany the Statement of Just
Compensation. In advance of initiating negotiations with the property owner(s), the negotiator
should be thoroughly familiar with the Federal project, and should review the appraisal, title
evidence, and preliminary title report in detail. The negotiator should be sure that all matters that
could affect title or property value have been addressed. (Copies of an ownership disclaimer, an
Affidavit of Heirship, and a Certificate of NonInterference are included in Appendix 5-5.)

     Negotiations should be conducted in a businesslike and courteous manner, and the owner(s)'
right to relocation assistance, if applicable, should be fully explained. An offer, in writing,
should be made to the owner(s) for the amount determined to be just compensation. Normally, it
should take no more than three negotiating sessions to either produce an acceptable agreement or
establish there is an insurmountable impasse.

     A written report of negotiations on each parcel must be prepared by the negotiator (see
Appendix 5-6). It should set forth the chronological history of the discussions, and document the
basis for the negotiator's conclusions for acceptance or rejection.

     Purchase options for real estate needed in connection to a DOE project may be obtained
only at no cost to the Government (see Option Agreement, Appendix 5-7). Contractors may not
acquire options if the cost is to be ultimately paid by DOE under contract.

U. S. Department of Energy                                                  Revised June 2004
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Conditions or Exceptions in Contract to Sell
     Reservations for crops, timber, or improvements will be allowed if determined to be in the
best interest of the Government. Generally, all subsurface rights to minerals, oil, coal, and gas
should be obtained. Following acquisition, the property may, if circumstances permit, be
outleased to former owners or tenants pending need for Government purposes.

Deed Preparation
      The deed to the property acquired should be prepared in accordance with the Department of
Justice (DOJ) requirements. Once executed, it should be promptly recorded in the local
jurisdiction. When an acceptable title document has been received, it should be forwarded to
DOJ for approval. Property may not be acquired until DOJ has approved title.

     Closing of the fee acquisition takes place following DOJ title approval. When the closing
attorney determines that the title is clear, the owner may be paid for the property. At the same
time, DOE takes possession of the property. As soon as DOE assumes possession, a DOE
employee should inspect the acquired property, and prepare a “Certificate of Inspection and
Possession,” (Appendix 5-8).

     Following closing, a final title assembly is submitted to the Attorney General with a request
for a preliminary and final title opinion. The Attorney General's title opinion and related
documents will be made part of the DOE official property file maintained by the acquiring

    The General Services Administration (GSA), pursuant to Section 202(a) of the Federal
Property and Administrative Services Act of 1949 is authorized to transfer excess real property
among Federal agencies. Notices regarding available excess property are issued frequently by
GSA. A request for transfer of property, for which the receiving agency pays fair market value,
should be submitted to the GSA together with a completed GSA Form 1334, "Request for
Transfer of Excess Real Property and Related Personal Property" (see Appendix 5-9).

     The Department of the Interior (DOI) is delegated responsibility for withdrawing and
reserving public domain land. Pursuant to PL 95-91, DOE may request that DOI withdraw public
domain land for DOE usage. The program office, in conjunction with the real property
representative, develops the requirements. The field element prepares an application in
accordance with the requirements in 43 CFR 2310, and submits it to the appropriate Bureau of
Land Management (BLM) office. See DOE Order 4300.1C, paragraph 5.b.(2) for information on
preparation of the justification for withdrawal.

U. S. Department of Energy                                                Revised June 2004
Chapter 5: Acquisition of Interests In Real Property
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     If the request for withdrawal exceeds 5,000 acres, the Secretary of the Interior must notify
both houses of Congress. Congress has a minimum of 90 days in which to respond or take no

     When approved by DOI, a public land order, to be published in the Federal Register, is
issued by that Department, withdrawing the property for DOE use. New withdrawals are for a
maximum of 20 years, at which time they must be rejustified and reapproved by DOI (see
Section 204(e) of PL 94-579 (90 Stat. 2743». Needs exceeding 20 years must be approved by

     Like other acquisitions, exchanges and donations require programmatic justification. The
procedure for acquiring properties through these means are the same as for fee purchase.
Appraisals must be obtained on all properties involved, and the owner conveying property to the
Government must receive full value unless a written waiver is signed. Donated property must be
approved by the Secretary of Energy, and a formal agreement signed which sets forth the terms
and conditions.

    Often, budgetary and management considerations will lead to the conclusion that
acquisition of a leasehold interest in real property is more beneficial to the Government than fee

     The Department of Energy has authority to lease certain types of property pursuant to PL
95-91 (91 Stat. 565). The Department may also authorize its contractors to acquire leased space
to house contractor personnel, but DOE is responsible for overseeing the lease procurement of its
contractor when the rental is directly reimbursed under the DOE contract; however the contractor
may procure such space under its own corporate authority which is not reimbursed under the
DOE contract without DOE approval. The General Services Administration is generally re-
sponsible for the acquisition of general-purpose office and related space needed by DOE (See
Chapter 6 of this Guide), but has delegated to DOE authority to lease certain types of space.
These various authorities are examined in detail in DOE Order 4300.1C, paragraph 7(a-f).
Specific guidance on the lease acquisition process is contained in the United States Department
of Energy Leasing Handbook (June 1990), as revised. (See Chapter 7 and Appendix 7 of this

     In some instances, a real property interest less than fee or leasehold will satisfy a particular
requirement. In such cases, the need may be met by procurement of an easement (permanent or
temporary), a permit or license, or through acceptance of gift property.

    Easements give the grantee the right to make limited use of the grantor's property. Property

U. S. Department of Energy                                                  Revised June 2004
Chapter 5: Acquisition of Interests In Real Property
                                                 Real Property Desk Guide                5-8
owners may grant permanent easements permitting rights-of-way over or through their property,
or they may issue temporary easements for short-term needs, such as access to a property. If the
cost of the easement exceeds $10,000, an appraisal is required. In some cases, it will be
necessary to acquire permanent easements by condemnation. (See DOE Order 4300.1C,
paragraph 8.a.)

Licenses and Permits
     Temporary use of real property may also be obtained through permits or licenses. "Permits"
normally refer to use of federally controlled property, while "license" applies to the use of
privately owned property. No permanent improvements may be placed on property being used
under these temporary interests. Licenses and permits must be approved as to form and content
by legal counsel. Contractors may obtain temporary use of property through licenses and
permits. (See DOE Order 4300.1 C, paragraph 8.b.)

     If the Government is unable to negotiate an acceptable agreement for the acquisition of the
needed property, DOE may, as a last resort, request the institution of condemnation action by the
Department of Justice under the Government's right of eminent domain. DOE Order 4300.1C,
chapter IV, paragraph 2, outlines circumstances where condemnation may be necessary.

     Recommendations for condemnation are approved by the Office of Counsel of the
appropriate field element, and submitted to Headquarters Real Estate for review. A con-
demnation assembly is prepared in accordance with the Department of Justice's "Procedural
Guide for the Acquisition of Real Property by Government Agencies." Owners should be
notified that the Government intends to pursue condemnation, and be given sufficient time to
accept the final offer.

     Upon the filing of the Declaration of Taking (see examples, Appendix 5-10), a check for the
estimated just compensation is deposited into the Registry of the Court, and the court establishes
a time and the terms on which the property will be surrendered, and issues an appropriate Order
of Possession or right of entry. Property owners may be allowed to remain on the property under
an outlease agreement pending need by the Government.

     Following filing of the Declaration of Taking, the field organization acquiring the property
should: post the property to indicate Government ownership; inspect the property and complete a
“Certificate of Inspection and Possession;” and update the title evidence and appraisals to the
date of taking.

     If a settlement agreement on the amount of just compensation can be reached with the
former owner(s), a stipulation, approved by the U. S. Attorney involved, may be executed. If a
court award results in an amount in excess of the deposit, the U. S. Attorney will request a
deficiency check be deposited by DOE into the Registry of the Court. Should the U. S. Attorney
consider the award unreasonable, he will contact DOE regarding possible appeal.

U. S. Department of Energy                                                Revised June 2004
Chapter 5: Acquisition of Interests In Real Property
                                                 Real Property Desk Guide                 5-9
    All legal documents related to the condemnation action should be maintained in the real
property files at the installation.

     The procurement of appraisal service is a necessity in virtually all real estate transactions.
Independently prepared estimates of property value are needed in connection with planning
decisions, and are an essential element in acquiring, leasing, and disposing of real estate.
Appraisals are also mandatory for property being acquired in accordance with the requirements
of Public Law 91-646, the Uniform Relocation Assistance and Real Property Acquisition
Policies Act of 1970 (84 Stat. 1894), and pursuant to certain acquisition and disposal sections of
the Federal Property Management Regulations (d. section 101-18; section 101-47).

     Qualified appraisers, preferably with an MAI (Member of the Appraisal Institute)
designation, should be obtained to prepare appraisals for DOE. Specialists in certain areas of
appraisal may be needed for unique or complex property acquisitions or disposals.

     Appraisals are generally used to establish:
     Fair Market Value - needed for the acquisition and disposal of fee ownerships
     and permanent easements.

     Fair Rental Value - needed for the leasehold acquisition and outleasing of real property.

     Value for Offsite Removal- needed in cases where real property is acquired or disposed of
     without the underlying fee, and must be moved from the site.

     The above terms are defined in more detail in DOE Order 4300.1C, Chapter III, paragraph

U. S. Department of Energy                                                 Revised June 2004
Chapter 5: Acquisition of Interests In Real Property
                                                 Real Property Desk Guide               5-10
     Usually, appraisal service may be obtained through the Corps of Engineers pursuant to the
DOE-USACE Memorandum of Understanding (see Appendix 5-3). This service may also be
secured through the General Services Administration or by DOE itself through informal
solicitation. In an informal solicitation, at least three qualified appraisers should be asked to
submit letters outlining their proposals. If the appraisal fee will exceed $10,000, formal
procurement procedures must be followed.

    Appraisals must be consistent with the “Uniform Appraisal Standards for Federal Land
Acquisition of 1973”, and other professional standards. A professionally prepared appraisal
should thoroughly explain and fully document the basis for the appraised value.

     The appraisal must be reviewed before the proposed real estate action is undertaken, and
before the appraisal fee is authorized. Appraisals may be reviewed by Certified Realty
Specialists or, if necessary, by other agency appraisers, a fee review appraiser, or by
Headquarters Real Estate. An Appraisal Checklist (Appendix 5-11) may be used in the appraisal

     Acquisition of property from private individuals must be in accordance with PL 91646,
Title III, which requires full disclosure by the acquiring agency of information bearing on its
valuation of the owner's property. Paragraph 2.e. of DOE Order 4300.1C, Chapter III, lists the
requirements under PL 91-646, Title III.

U. S. Department of Energy                                               Revised June 2004
Chapter 5: Acquisition of Interests In Real Property